BenefitsCanada • September 2013 / 51 BENEFITS GETTY IMAGES DOING IT RIGHT How can employers encourage true behaviour change in employees? W hile virtue may be its own reward, it may not be enough to motivate employees to be active, quit smoking or lose weight. Study after study has proven that exercise and eating right are key factors in reducing stress and avoiding disease, but what can employers do to encourage employees to do the right thing? Researchers have spent a lot of time attempting to determine which tool—a carrot or a stick—is most effective for changing behaviour. It’s actually both. A strategic combination of plan design changes to encourage employee responsibility (the stick) and new programs or philosophies to encourage better health choices (the carrot) can produce results. First off, as an employer, you need to determine what you want your employees to do. Use less-expensive drugs? Use fewer drugs? Take fewer sick days? Be more engaged in their work? Stay longer in your employment? Few programs can do it all, so it’s important to identify goals for your benefits program, craft an appropriate strategy and select the metrics to measure success. e “right thing” is different for each workplace and for each employee within that workplace. A strategic approach will allow your program to target your employees’ issues, maximizing your return on investment (ROI), potentially reducing benefits costs and increasing employee engagement. A review of your plan’s experience and design will highlight opportunities for changes in behaviour. By Lizann Reitmeier
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BenefitsCanada • September 2013 / 51
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Doing it Right
How can employers encourage true behaviour change in employees?
While virtue may be its own reward, it may not be enough to motivate employees to
be active, quit smoking or lose weight. Study after study has proven that exercise and eating right are key factors in reducing stress and avoiding disease, but what can employers do to encourage employees to do the right thing?
Researchers have spent a lot of time attempting to determine which tool—a carrot or a stick—is most effective for changing behaviour. It’s actually both. A strategic combination of plan design changes to encourage employee responsibility (the stick) and new programs or philosophies to encourage better health choices (the carrot) can produce results.
First off, as an employer, you need to determine what you want your employees to do. Use less-expensive drugs? Use fewer drugs? Take fewer sick days? Be more engaged in their work? Stay longer in your employment? Few programs can do it all, so it’s important to identify goals for your benefits program, craft an appropriate strategy and select the metrics to measure success.
The “right thing” is different for each workplace and for each employee within that workplace. A strategic approach will allow your program to target your employees’ issues, maximizing your return on investment (ROI), potentially reducing benefits costs and increasing employee engagement. A review of your plan’s experience and design will highlight opportunities for changes in behaviour.
By Lizann Reitmeier
40 years of providing top corporations with customized fnancial counsel through seminars, individual fnancial planning and online solutions.
To learn more about how T.E. Wealth is helping employers, please visit
w w w.tewealth.com/education
Roland Chiwetelu, CFP, Consultant
Financial Education & Employer Services
Toronto
Vancouver • Ca lgar y • Toronto • Montrea l • S t . John’s
A formal health risk assessment (HRA) collects key health indicators for participating employees. Additionally, predictive claims modelling can help determine the health challenges that your employee population faces based on the claims paid under your benefits plan. Looking at the results of these tools in combination will give you the best overall picture of organizational health and support you in setting a strategic approach to change employee behaviour.
targeted educationOnce you’ve identified the goals of your benefits program, you need to educate employees. Communication of initiatives (e.g., a fitness challenge) is important to encourage employee participation, but communication of more complex changes (e.g., mandatory generic drug substitution) requires employee understanding. Employees who understand that the motivation for a
change is to promote the long-term financial viability of the plan and ensure that protection will be there for the future will be more accepting of the change.
Many employers have access to wellness resources through their existing benefits plan. Employee assistance programs provide valuable support for employees with mental health issues. In addition, many providers include initiatives to quit smoking, as well as access to nutritionists and resources to reduce stress, in their basic programs. Review your existing programs in relation to your strategic goals to leverage what you can from them and highlight these programs in your communications.
strategic incentives Would incentives encourage employees to do the right thing? A recent study by the Mayo Clinic found that people were more likely to lose weight when offered a cash incentive of $20 per month. On the
flip side, participants who did not lose weight were charged a penalty of $20. Sixty-two percent of the participants in this study stuck with the program for a full year and lost an average of 9.1 pounds. By comparison, in the control group (without the financial incentive), only 26% of participants completed the year-long study, and the average weight lost was only 2.3 pounds. The 2010 Sanofi Canada Healthcare Survey found that 43% of employers were not using any incentives to encourage employees to participate in wellness activities.
The 2010 Mercer Policies and Practices Survey report indicated that just over half of the participating employers provide their employees with a healthcare spending account (HCSA). While it is not yet typical in the Canadian marketplace, an employer could provide an additional deposit into an employee’s HCSA in exchange for participating in wellness-related initiatives, such as an HRA. This could be a tax-effective method of incenting employees while maximizing a tool that is already in place.
A recent Sun Life Financial survey showed that generation Y employees would appreciate a subsidized fitness membership. Would this have the same effect as an actual reward? Recent changes in the tax legislation mean that gym memberships can be provided to employees tax-free under certain conditions, making this option even more attractive.
Promoting AccountabilityAccording to the Mercer Plan Design Database, less than 36% of employers are providing 100% coverage for drugs. Many employers have started to institute cost management in their plans through deductibles, co-pays and drug formularies. These not only transfer the cost to employees but also provide an opportunity to reinforce the corporate strategy and educate employees. Historically, one roadblock to plan design innovation has been an inability to customize claims administration systems. But some insurers have recently taken dramatic steps to change employee behaviour and reduce costs. For example, a few insurers have mandated the use of generic drugs, changing previous policies that allowed
When reliability meets innovation, that’s service you can trust.
employees to be reimbursed for the full cost of a brand name drug when a generic substitution exists if the doctor writes “no substitution” on the prescription.
In addition, one insurer has introduced health case management for plan members taking certain drugs. The health case management program includes monitoring the behaviour of the patient to ensure compliance with the treatment regimen. This should help reduce drug waste from people filling prescriptions but not taking the drugs properly or at all. Ideally, better compliance will improve health outcomes, making treatment more cost-effective and potentially avoiding disability claims.
Other innovations on the drug plan front include mandatory 90-day supplies for maintenance drugs and mail-order pharmacies or preferred provider pharmacy networks. When employees are made accountable, they have a vested interest in managing their own costs. Co-pays that incent employees to use less costly alternative drugs extend the appeal of these alternatives to employees who may not feel accountable to the drug plan but who appreciate the financial incentive of reduced out-of-pocket costs for participating.
top-down supportEmployees need to know that senior management supports benefits program initiatives. It is difficult to break away and take a fitness class at lunch, for instance, if management is scheduling meetings during this time.
Further, leading by example is crucial. A walking challenge for all employees will be much better received if the company president is seen with a pedometer, taking the stairs. This top-down approach encourages employees to participate, drives a consistent message of health throughout an organization and encourages behaviour change.
the Right MetricsIt’s easy to see the cost benefit of replacing a more expensive drug with a less expensive drug, as the total drug spend under the benefits plan will decrease. The cost of avoidance, however, is less easily measured. The benefits of a wellness program that results in employees lowering their health risks without drugs are not quantified in dollars.
Your strategy should highlight some metrics that you expect to impact. The true savings of behaviour changes will probably never be measurable, as much
of the value is in the improved quality of life. However, tangible metrics are meaningful to management and will encourage ongoing support for programs that don’t directly affect the corporate bottom line. Healthy behaviour can result in reduced absence, so you should capture the rate of absences in your employee population. Behaviour changes can reduce the drugs required for many conditions—such as high blood pressure, high cholesterol and diabetes—so you need to track your drug claims. The right benefits strategy and behaviour change incentive can help reduce staff turnover—another metric that can be measured. Metrics with a sound basis that go beyond anecdotes will ensure the ongoing support of senior leadership, which will further encourage employee behaviour changes.
Making healthy choices is an ongoing challenge for everyone, but effective support from an employer can reinforce employees’ efforts. Ultimately, employees will be able to change their behaviour—for the better.
Employees need to know that senior management supports benefits
program initiatives
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HR trend reports show that employee engagement remains a top priority for HR professionals. The need to
ensure that employees who are at work are really at work (mentally, that is) is an ongoing issue that organizations face as they ponder the costs of lost productivity due to absenteeism and presenteeism.
And what are those costs? According to a U.S. study in the Journal of Occupational and Environmental Medicine that looked at lost productivity for 10 U.S. employers (a combined sample of 51,648 workers), health-related productivity costs were 2.3 times (on average) the cost of medical and pharmacy costs.
Of course, employees’ physical and emotional health is fundamental to helping them get to the right “space” so they are ready and willing to be engaged. A culture that values and promotes good health influences that engagement.
EnerCare Inc. set out to positively influence employees’ health behaviours by facilitating multiple physical and emotional health activities. EnerCare owns a portfolio of approximately
1.2 million water heaters as well as other assets that are rented primarily to residential customers in Ontario. The company also provides sub-metering services for electricity, heat and water to condominiums and apartments in Ontario, Alberta and elsewhere across Canada. The company has grown from approximately 50 employees three years ago to more than 130 employees today.
Len Bates, director of HR, is well aware that Canada’s full-time workers are at the greatest risk of burnout due to high chronic stress. In fact, according to Sun Life Financial’s 2011 Canadian Health Index, they are at 22% greater risk than the Canadian average. “It’s becoming common knowledge that stress significantly contributes to the development of chronic physical illness, such as high blood pressure,” says Bates. “At EnerCare, we want to ensure our wellness strategies address both physical and mental health. Not only does this help employees’ well-being but productivity increases, and health claims and experience are better managed when employee health is improved.”
Time Out forgooD BehaviouREnerCare provides opportunities for employees to improve their physical and mental health
By Esther Huberman
EnerCare’s culture nurtures employees’ good health and behaviour by providing plenty of opportunities for employees to participate in healthy mental and physical practices. Get the World Moving, for one, is a global program that motivates, inspires, supports, educates and engages employees in a healthier lifestyle. EnerCare pays the $100 annual fee for employees to participate and, through a series of team and personal challenges, employees are encouraged to improve their health and weight through increased physical activity. Almost half of EnerCare’s employees participate in this program and work to reach the minimum goal of 10,000 steps a day. The program supplies participants with pedometers to easily track their steps, and seven EnerCare employee teams regularly walk together. Bates says even employees who do not participate but simply observe the walking teams are encouraged to increase their daily physical activity.
With a GoodLife Fitness gym located across the street from EnerCare’s Toronto head office, employees are motivated to undertake regular gym
workouts. EnerCare successfully negotiated a favourable corporate rate and pays participating employees’ annual membership fees in one lump sum. Employees then reimburse the organiza-tion through semi-monthly payroll deductions. The ability to purchase a membership through installments makes participation more financially manage-able for many. EnerCare also arranges for an on-site flu shot clinic, making it easier for employees to participate in this important public health measure.
To promote mental and emotional well-being, the company provides employees with a Wellness Room, which is often used for prayer and meditation. “Our Wellness Room communicates our respect for employees’ desire and need for spiritual expression and the importance of occasionally regrouping to strengthen one’s mental energies,” Bates explains. “It is conveniently located, expressing our recognition of an individual’s spiritual needs while at work.”
EnerCare also offers the occasional fun activity, such as the company-wide annual Ski (or Snowboard) Day. Employees who
participate leave work for the ski hill midday and ski or snowboard into the evening. In addition, department heads are encouraged to organize special events for their staff. In 2012, EnerCare staff participated in a variety of activities, such as curling, sailing and go-karting. The result is greater employee engagement and appreciation, which improves presenteeism and absenteeism levels.
Clearly, EnerCare understands the link between employee health and productivity. “I know that there is a positive connection between healthy, engaged mentally and physically active employees and a productive, positive workplace where employees want to come to work every day,” says Bates. “We continue to fine-tune our wellness program, and we continue to be proud of our employees for their participation and their productivity.”
Looking for more examples of employers that walk the talk
on wellness? Go to benefitscanada.com/wellness
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